8 INTERNATIONAL MONETARY FUND
6. In September 2 012 the Executive Board approved a distribution of the Fund’s general
reserves SDR 1.75 billion attributed to the remaining windfall gold sales profits as part of a strategy to make the PRGT self-sustaining in the longer term.
4
This strategy rests on three pillars: i a base annual average lending capacity of SDR 1¼ billion; ii contingent measures which
can be activated when average financing needs exceed the base envelope by a substantial margin for an extended period; and iii the expectation that all modifications to LIC facilities would be
designed in a manner that is consistent with maintaining self-sustainability. This distribution will be effected only after members have provided satisfactory assurances that new amounts equivalent to
at least 90 percent of the amount to be distributed will be transferred or otherwise provided to the PRGT see Box 2.
7. In December 2012, taking account of the ongoing global economic crisis, the Executive Board approved a two-year extension of the temporary interest waiver on PRGT loans
through end-2014.
5
In view of the modest additional cost to the PRGT, the extension of the temporary waiver was considered to be consistent with the three-pillar strategy to establish a
self-sustaining PRGT, but it remains important for the integrity of the agreed financing framework that the interest rate mechanism be allowed to function as was originally envisaged, once conditions
return to normal.
6
8. The second stage of the review of facilities for low-income countries and the 2013 review of PRGT eligibility was discussed by the Executive Board in April 2013.
7
The adopted modifications are expected to keep demand consistent with the available resources over the longer
term, under a wide range of scenarios.
SOURCES OF FINANCING FOR THE PRGT
9. The 2009 LIC financing package, approved in July 2009 as part of the LIC reforms, aimed to provide enhanced financial support to LICs which had been severely affected by the
global economic crisis. The financing package, which sought
to increase the Fund’s concessional lending capacity to SDR 11.3 billion for 2009
–14, required the mobilization of new loan resources of SDR 10.8 billion including a liquidity buffer of SDR 1.8 billion to enable a voluntary encashment
regime and new subsidy resources of SDR 1.5 billion end-2008 NPV terms.
8
Most of the additional
4
See Proposal to Distribute Remaining Windfall Gold Sales Profits and Strategy to Make the Poverty Reduction and
Growth Trust Sustainable 91712 and
IMF Executive Board Approves the Distribution of Remaining Windfall Gold Sales Profits
.
5
See PRGT Interest rate Mechanism
– Extension of Temporary Interest Rate Waiver 121412.
6
Absent the waiver, the applicable interest rate for 2013 and 2014 would have been zero percent for all ECF and RCF loans, and 0.25 percent for SCF loans.
7
See Review of Facilities for Low-Income Countries
31513 and Eligibility to Use the Fund’s Facilities for Concessional
Financing 31513.
8
Under the encashment regime, the PRGT provides participating lendersnote purchasers with the right to request early repayment of outstanding claims in case of balance of payments need. Participating lendersnote
purchasers agree that drawings under their borrowing arrangements with the PRGT could be made to fund early repayment of other participating lenders that face a balance of payments need. The Fund repays the
continued
INTERNATIONAL MONETARY FUND 9
subsidies were to be financed from the Fund’s internal resources—including transfers from the PRGT Reserve Account, delaying until FY 2013 the resumption of reimbursement of the GRA for PRGT
administrative costs, and use of resources linked to gold sales as a means to facilitate new subsidy resources. Bilateral subsidy contributions of SDR 200
–400 million end-2008 NPV terms were also important to complete the financing package. The Managing Director approached a wide spectrum
of the membership in 2009 to mobilize the required loan and subsidy resources, and staff continues to follow up on these requests.
10. The 2009 –14 financing package is now largely complete. As of end-August 2013,
Kategori